IMPACT OF EXCHANGE RATE AND CUSTOMS UNION ON TRADE BALANCE AT COMMODITY LEVEL OF TURKEY WITH EU (15)

Date

2011-09-01

Author

Yazici, Mehmet
İslam, Muhammed Qamarul

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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This paper investigates the short-run and long-run impact of exchange rate and customs union on the trade balance at commodity-group level of Turkey with EU (15). Bounds testing approach is employed where a new strategy in the model selection phase is odopted ensuring that optimal model is selected from those models satisfying both diagnostics and cointegration. Results indicate that in the short-run exchange rate matters in determination of trade balance of 13 commodity groups out of 21 and customs union in 8 cases. Pattern of response of trade balance to exchange rate does not suggest a J-curve effect in any of cases. As for the long-run effect, neither exchange rate nor customs union has a statistically significant effect on trade balance of any of commodity groups, suggesting that those significant short-run effects don't last into long-run.

URI

https://hdl.handle.net/11511/92261

Journal

ECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA

DOI

https://doi.org/10.1080/1331677x.2011.11517468

Collections

Department of Statistics, Article

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Citation Formats

M. Yazici and M. Q. İslam, “IMPACT OF EXCHANGE RATE AND CUSTOMS UNION ON TRADE BALANCE AT COMMODITY LEVEL OF TURKEY WITH EU (15),” ECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA, vol. 24, no. 3, pp. 75–85, 2011, Accessed: 00, 2021. [Online]. Available: https://hdl.handle.net/11511/92261.